- Advertisement -
- Advertisement -

Norron Flying Norwegian in April

- Advertisement -

Stockholm (HedgeNordic) – The two hedge funds from Swedish asset manager Norron – Norron Target and Norron Select – rallied strongly during the month of April to bring year-to-date returns into positive territory.

Judging from the manager´s own review of the month, it was all about a long derivatives position in Norwegian Air Shuttle (NAS) that made the difference. The NAS stock, which up until April had failed to impress the market in any meaningful way, surged by 80 percent during the month as information leaked about IAG, the parent company of British Ariways, preparing a bid for the company in which it had bought close to 5 percent already. Norwegian later confirmed that they had received several propositions from potential buyers, which further intensified the rally in the stock.

Commenting on its position in NAS, Norron, in its monthly performance commentary for April, writes:

“We participated in a new share issue in the company and that was well perceived in the market. NAS has been under pressure all year to some extent due to worries of
a new issue, so again, when it actually happened, the negatives turned to positives and the stock started to perform. After a couple of days we argued that this company, due to its high leverage, could move significantly upwards and create a short squeeze in the market, so the only thing it could not really do was park at 185. We decided to change our exposure to long dated call options and sell our shares. This strategy turned out to be a success due to the fact that IAG, the parent company of British Airways, invested in the share issue and expressed interest in a takeover which sparked a massive rally in the shares. It’s important to mention that there are other bidders around. We have secured some profits by rolling the strike to 300 (from 220).”

As a result of the NAS position and a generally upbeat sentiment among its holdings in Nordic small-cap companies, the Norron Select fund gained 6.5 percent in April, translating into a positive 0.5 percent for the full year. The Norron Target fund, also holding the NAS exposure, gained 2.2 percent on the month bringing the year-to-date return to 1.5 percent. The funds have yet to experience a negative year since launching in 2012.

Picture source: www.media.norwegian.com


Subscribe to HedgeBrev, HedgeNordic’s weekly newsletter, and never miss the latest news!

Our newsletter is sent once a week, every Friday.

Jonathan Furelid
Jonathan Furelid
Jonathan Furelid is editor and hedge fund analyst at HedgeNordic. Having a background allocating institutional portfolios of systematic strategies at CTA-specialist RPM Risk & Portfolio Management, Mr. Furelid’s focus areas include sytematic macro and CTAs. Jonathan can be reached at: jonathan@hedgenordic.com


Most Popular This Week


Request for Proposal

- Advertisement -

Latest Articles

Lynx is Fund Company of the Year, Says Privata Affärer

Stockholm (HedgeNordic) – Lynx Asset Management has been named “Fund Company of the Year” by Swedish business magazine Privata Affärer. The distinction comes after...

RFP: Absolute Return Multi-Strategy/Fund of Funds

(Global Fund Search) - A Danish Institutional Investor is searching for an absolute return strategy for an allocation of EUR 40 million. The mandate...

Brummer Multi-Strategy Navigates 2022’s “Perfect” Storm

Stockholm (HedgeNordic) – 2022 experienced a “perfect” inflation storm due to an unprecedented amount of monetary and fiscal policy stimulus during the pandemic, war,...

Dream Comes True for Grönblom

Stockholm (HedgeNordic) – Ernst Grönblom had been running his high-conviction strategy of cherry-picking the stock market’s undervalued future winners under the umbrella of United...

Boarding the Broader Alternatives Ship

Stockholm (HedgeNordic) – Tore Davidsen, portfolio manager of SEB Eureka Fixed Income Relative Value since its launch in 2018, will join BankInvest as Senior...

Year of Stabilization of Interest Rates

By Kari Vatanen, CIO of Veritas: The year 2022 was a year of negative surprises in the investment markets and in the global economy. Hopes...